Bye-Bye Medicaid Asset Test*

The Affordable Care Act (ACA) goes a long way toward simplifying Medicaid eligibility. Go try and figure it out from the legislative language and you’re not likely to believe me. Fortunately, Joy Johnson Wilson, Health Policy Director for the National Conference of State Legislatures, has done the dirty work. In a handy document Wilson summarizes Medicaid and CHIP provisions in the new law and compares them to current law.

In particular, on page 8 Wilson notes that the ACA “[r]equires states to use a net income standard (no asset or resource test, no income disregards) to determine [Medicaid] eligibility.” Yep, you read that right, bye-bye asset test. Hello simple income test. The new federal income eligibility threshold will be 133% of the federal poverty level (effective 1/1/14).

Essentially, the Medicaid expansion under the ACA will broaden Medicaid eligibility for low-income, non-elderly adults without regard to assets. A major exception for that age group are those with incomes above the threshold but with high out-of-pocket medical costs. Such individuals will be required to spend their assets down to the existing asset limit, which varies by state and is typically a few thousand dollars.

There are a few other caveats. Existing rules, including the asset tests, will continue to apply for individuals obtaining Medicaid eligibility through another program (e.g. foster care children, or SSI/SSDI recipients) and the elderly.

Medicaid qualification just got a whole lot easier (or, rather, it will in 2014).

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